Copper Futures

Background and Fundamentals

Copper is among the most important industrial metals, along with aluminum, zinc, nickel, lead and platinum.

Copper is a ductile metal with excellent electrical conductivity. It is a great conductor of heat and electricity and is widely used in the building construction and electrical industries. It is used for housing and construction wiring and semiconductor industries for wiring. Copper also serves as an alloying agent due to it malleability, strength and corrosion resistance. It is the third most used metal in the world. The most active copper mines are in the United States, Chile, Mexico, Australia, Indonesia, Zaire and Zambia.

As a result of it’s use in housing contruction it copper prices are closely tied to the housing market.

Copper Futures Contract Specifications

Copper trades on two exchanges – the London Metal Exchange (LME) and the New York Mercantile Exchange (NYMEX) COMEX division. The copper contract on the LME accounts for 90% of copper futures trading volume.

LME Copper:

Trading Symbol: CAD

Contract: Grade A Copper

Lot size: Lot size 25 tonnes (with a tolerance of +/- 2%)

Quotation: US dollars per tonne

Minimum Price Movement: Ring – Outright $0.50, Carries $0.01
LME Select – Outright $0.25, Carries $0.01
Inter-office  – Outright/Carries $0.01

NYMEX/COMEX Copper Futures:

Trading Symbol: HG

Trading Unit: 25,000 pounds.

Price Quotation: U.S. cents per pound.

Trading Hours: Open outcry trading is conducted from 8:10 AM until 1:00 PM (ET)Electronic trading is conducted from 6:00 PM until 5:15 PM via the CME Globex® trading platform, Sunday through Friday. There is a 45-minute break each day between 5:15PM (current trade date) and 6:00 PM (next trade date).

Trading Months: Trading is conducted for delivery during the current calendar month and the next 23 consecutive calendar months.

Minimum Price Fluctuation: Price changes are registered in multiples of five one-hundredths of one cent (0.05¢ or $0.0005) per pound, equivalent to $12.50 per contract. A fluctuation of one cent (1¢ or $0.01) is equivalent to $250 per contract.

Last Trading Day: Trading terminates at the close of business on the third to last business day of the maturing delivery month.